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Fuzzy Logic and Intelligent Agents: Towards the Next Step of Capital Budgeting Decision Support

Mikael Collan, Shuhua Liu, Fuzzy Logic and Intelligent Agents: Towards the Next Step of Capital Budgeting Decision Support. Industrial Management and Data Systems , 2002.

Abstract:

The economic life of large investments is long and thus necessitates constant dynamic managerial actions. To be able to act in an optimal way in the dynamic management of large investments managers need the support of advanced analytical tools. They need to have constant access to information about the real time situation of the investment, as well as, access to up-to-date information about changes in the business
environment. What is more challenging, they need to integrate qualitative information into quantitative analysis process, and to integrate foresight information into the capital budgeting process.

<p>In this paper we will look at how emerging soft computing technologies,
specifically fuzzy logic and intelligent agents, will help to provide a better support in such a context and then to frame a support system that will make an integrated application of the aforementioned technologies. We will first introduce traditional and advanced methods for capital budgeting and investment decision making. We will then present a process view of the real option framework based investment management, and develop a holistic framework for an agent-facilitated capital budgeting system using a fuzzy real option approach. We will discuss how intelligent agents can be applied to collect decision information, both qualitative and quantitative, and to facilitate the integration of foresight information into capital budgeting process, and how the agents can be constructed. Finally, we also elaborate on the managerial implications of the proposed decision support technology.

BibTeX entry:

@ARTICLE{jCoLi02a,
  title = {Fuzzy Logic and Intelligent Agents: Towards the Next Step of Capital Budgeting Decision Support},
  author = {Collan, Mikael and Liu, Shuhua},
  journal = {Industrial Management and Data Systems},
  year = {2002},
  keywords = {Fuzzy Logic, intelligent Agents, Capital Budgeting, Real Options, DSS},
}

Belongs to TUCS Research Unit(s): Other

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